What does a homeowners insurance policy cover?
Individual homeowners policies vary, however, a large percentage of policies are based on a standard form and all homeowners policies cover two important areas: property and liability. It will also cover you for additional living expenses should your home not be liveable for a period of time due to a covered peril.
At minimum, homeowners insurance usually covers damage caused by:
- Fire or lightning
- Windstorm of hail
- Theft or vandalism
- Falling objects
- Weight of ice, snow or sleet
- Freezing of a plumbing, heating, air conditioning or other such household system.
Additional coverages can be purchased if you qualify.
Is the shed in my backyard covered under my policy?
Yes. Detached private structures like your shed, gazebo or detached garage are covered for up to 10% of the limit of your dwelling.
For example, if your home is valued at and insured for $300,000 then your other structures on your property would be covered up to $30,000.
What deductible is best for my home policy?
Your broker will help you shape your insurance policy, but you will need to decide what you want the deductible to be. You can reduce your monthly premiums by opting for a higher deductible or decrease your deductible by choosing to pay higher premiums. There is usually a minimum deductible but the rule of thumb is that you need a deductible that you can afford if something goes wrong. If a fire destroys an entire floor of your house, you can’t be in a position where you aren’t able to afford the deductible.
I work out of my home. Is my business property covered?
Yes, within certain limits and only while on your premises. Other business property including samples and goods held for sale, are not insured. Keep in mind that the personal liability coverage in your homeowners policy does not extend to business liability.
Check with your broker concerning your business insurance needs.
What if I am sued or found responsible for injuring another person?
Liability covers all sums which you become legally liable to pay because of unintentional bodily injury or property damage. It covers your personal liability arising out of your personal actions anywhere in the world. Should you be sued as a result of your negligent actions or suspect that you might be sued, contact your broker or company representative immediately.
What is an actual cash value settlement and how is it determined?
An actual cash value settlement takes into account the replacement cost of the item less wear, tear, and depreciation. Depreciation is calculated based on the age, usage and quality of the item involved.